Credit Card Agreements That Don't Need a "For Dummies" Book to Understand

Government agencies - and private companies and nonprofits - benefit greatly from the leadership of dedicated, inspiring executives. The Consumer Financial Protection Bureau will be less than it could have been had Senate repugs not refused to allow even debate about Richard Cordray, the person President Obama nominated to head the bureau.

But the absence of a director has not and will not kill the CFPB, which is moving fast to fulfill its mandate as conceived by consumer protection guru - and now Senate candidate - Elizabeth Warren.

From the White House:

Despite not having a director, the CFPB is doing everything they can to fight for consumers. In fact, this week, they kicked off a pilot program to simplify credit card agreements, and we wanted to make sure you saw it. Read their email below.

Millions of times every year, financial institutions issue a new credit card agreement to their customers. And every year, millions of consumers receive new agreements and do not read them.

We have an idea that we think can make things better: a simplified credit card agreement.

Check it out, and tell us what you think.

http://www.consumerfinance.gov/credit-cards/knowbeforeyouowe/

Credit cards are simple to use, but consumers have a lot of choice in exactly how they use them. Differences between cards provide even more choices to consumers.

Credit card agreements describe the terms and features of a particular card. They spell out the rights and obligations of both parties, and provide legal protections for the issuer.

This can result in a dense and complicated document that can be difficult for consumers to understand.

The thought-starter we’ve developed reduces this complexity. We’ve separated the key terms from the legalese, leaving a clear, readable document.

We think it makes sense to give consumers a short, understandable document with the key terms they need to know. And we think it makes sense to give issuers the option to use our definitions, freely available on our website. We think this could reduce the costs of compliance and printing.

But as credit card users and issuers, you’re the people who need these agreements to work for you, so we want to know what you think. Would consumers be more likely to read this? Could issuers use this approach for their own products?

Take a look at what we’ve come up with. Weigh in with your thoughts to help us make credit card agreements better.

http://www.consumerfinance.gov/credit-cards/knowbeforeyouowe/

Thank you,

Marla Blow
Acting Assistant Director, Card Markets
The Consumer Financial Protection Bureau

Banks deliberately compose those insane, undreadable "agreements" to prevent anyone from understand what you are really getting into by accepting the bank's terms.

Banks know an understandable credit card agreement is going to cut deeply into their profits, and they will do their best to quash it.

Stop them. Read the new agreement, and tell Maria Blow how you think it can be improved. Thank her, too, for CFPB's work protecting you from the banksters.